- AUD/USD seesaws near the upper end of the latest trading range.
- Aussie, AiG Performance of Manufacturing Index surprised with an uptick.
- Coronavirus cases rise in the US, defy optimism from the European numbers.
- Fed announced temporary repo facilities for central banks, China flashed upbeat PMI.
AUD/USD takes rounds to the upper end of the latest trading range while flashing 0.6150 as a quote at the start of Wednesday’s Asian session. The pair paid a little heed to Australia’s second-tier activity data in search of more clues from the upcoming figures. Though, coronavirus (COVID-19) figures tame the risk sentiment and caps the quote’s immediate upside.
The AiG Performance of Manufacturing Index for March surprised markets with 53.7 figures versus 44.3 prior.
The Aussie pair stepped back from the two-week high the previous day as the early-day optimism triggered through upbeat China data/updates waned after disturbing coronavirus (COVID-19) figures from the US and Europe. There are more than 177,000 cases in the US whereas Spain and Italy together register above 200,000 numbers.
US President Donald Trump ruled out calls for national lockdown while also signaled to use $2.00 as a fiscal stimulus. Though analysts at the Australia and New Zealand Banking Group (ANZ) cite fears while getting approval for such a huge spending plan considering it’s equivalence to 9% of nominal GDP.
The Fed also offered another boost to US dollar liquidity in the global markets via repurchase auctions for foreign central banks and other international monetary authorities.
On the data side, the US Consumer Confidence fell sharply to 120.0 in March from 132.6 in February whereas Chicago PMI’s declines to 47.8, versus 49.00 prior, was considered smaller than 40.00 forecast.
It’s worth mentioning that the US 10-year treasury yields dropped mildly to close Tuesday’s trading around 0.67% whereas Wall Street marked losses at the end of the first quarter (Q1) of 2020.
Moving on, Australia’s ANZ – Roy Morgan Consumer Confidence and Commonwealth Bank (CBA) Manufacturing PMI for March can act as the immediate catalysts whereas the virus news and comments from the US/Aussie policymakers, if any, could offer more clear direction.
A daily closing beyond 0.6200 becomes necessary for the buyers to extend the latest recovery moves, failing to do so can recall 0.6000 round-figure on the charts.
- Gold slides despite a risk-off end to the quarter in disjointed markets.
- Stock markets were less volatile but COVID-19 risks dominate in an underbelly of uncertainty.
Gold marked a fresh low on Wall Street during Tuesday’s session following a series of offers and despite a risk-off session, (for the most part) and the US dollar losing traction into the end of the quarter. Gold is trading at $1,576.70 at the time of writing in early Asia, -2.27% for the prior 24-hour period having travelled from a high of $1,626.55 to a low of $1,573.80.
Stock markets were less volatile than they have been in recent sessions, which weighed on gold to an extent. However, the final result was pretty, representing a manic first quarter to the year. More on that here: Wall Street Close: Benchmarks tumble into manic quarter’s end
In a snap-shot, the S&P 500 fell 1%, the DAX lifted 1.2% and the FTSE 100 climbed 1.9% while the bond markets were unfazed by Trump’s fiscal plans and as such, the yields on the US 10-year note fell 6bps to 66bps. Looking to the commodity markets, oil was slightly firmer with WTI adding 2% to USD20.5/bbl. The CRB index, however, remained flat, but that’s probably a positive in these markets conditions.
Stimulus measures soothing nerves
“Trump said he wants the next phase of fiscal stimulus to include USD2trn to spend on jobs and infrastructure,” analysts at ANZ bank noted. “This spending is equivalent to 9% of nominal GDP and it’s doubtful Congress would approve this level of spending. The Federal Reserve has established a temporary repo facility for foreign central banks and other international monetary authorities, which is expected to help smooth the functioning of financial markets.”
Here is what you need to know on Wednesday, April 1st:
- Equities traded mixed, with European indexes closing with gains but Wall Street in the red, amid persistent concerns related to the coronavirus pandemic. US equities edged lower for a second consecutive month. Investors are being extremely cautious as a volatile month came to an end.
- The COVID-19 outbreak gives no respite to major economies as the number of cases in the US is above 177,000. It’s growing also in Europe, with Spain and Italy reporting a total of 200,000 cases. The death toll remains high in Italy, while it grows in the US. The economic stalemate worldwide continues.
- Most major pairs remained within familiar levels, as speculative interest is running out of options. The Canadian dollar out-stands at the end of the day, appreciating against the greenback despite weakening oil prices.
- Gold suffered a major set back at the end of the day, falling despite a weaker dollar and a general risk-off mood.
- Crypto Today: Bitcoin vulnerabilities to the downside remain high underneath $7000 and breached bearish flag
- El peso mexicano gana modestamente el martes en todos los ámbitos.
- El USD/MXN se recupera durante la sesión estadounidense, sigue lejos del pico del lunes.
El par USD/MXN cayó a 23.33 el nivel más bajo desde el viernes y luego se recuperó hacia 23.70. El par permanece lejos del máximo semanal que alcanzó el lunes cuando saltó a 24.56. Se corrigió a la baja luego de que la Comisión de Bolsa de México anunció la primera subasta de crédito en dólares estadounidenses (desde la línea de intercambio con la Reserva Federal) hasta 5 mil millones para proporcionar liquidez.
El martes, el dólar retrocedió frente a la mayoría de las monedas de los mercados emergentes, en una sesión relativamente tranquila en los mercados financieros. La perspectiva económica y la propagación del coronavirus siguen siendo el principal impulsor. El lunes, la administración de López Obrador declaró una emergencia de salud. El anuncio desencadenó medidas más restrictivas que probablemente afectarán a la economía. El presidente mexicano ha sido criticado por priorizar la economía sobre la salud después de retrasar la introducción de la emergencia.
Un mes terrible para el peso mexicano
El USD/MXN está a punto de finalizar marzo con una ganancia del 21%, uno de los peores meses de la historia. El peso mexicano fue el mayor perdedor entre las monedas más negociadas en todo el mundo. Le sigue el USD/RUB que ganó 18% y el USD/COP 17%.
Primero, la dramática disminución de los precios del crudo, la aversión al riesgo global y las preocupaciones internas pesaron sobre el peso mexicano. Durante la mayor parte de 2019, el peso mexicano tuvo un rendimiento superior, esa situación se revirtió drásticamente en las últimas semanas.
- EUR/USD is consolidating last week’s bull-run near the 1.1000 figure.
- EUR/USD is having a second down day as the USD is mildly up on quarter-end flows.
EUR/USD daily chart
EUR/USD is retracing down from last week’s highs as the quote is consolidating close to the 1.1000 figure and the 100 DMA (daily simple moving average) while DXY is stabilizing. The quarter-end flows are currently benefitting the US dollar.
EUR/USD four-hour chart
EUR/USD is consolidating last week’s advance while holding above the 1.1000 key psychological level and the main SMAs on the four-hour chart. Bears would need a daily close below the 1.1000/1.0972 support zone for further declines towards the 1.0880 level, according to the Technical Confluences Indicator. Resistance can emerge near the 1.1046, 1.1091 and 1.1130 levels.
Resistance: 1.1046, 1.1091, 1.1130
Support: 1.1000, 1.0972, 1.0880
Additional key levels
In a CNBC interview, Fed’s Mester has said that she sees unemployment rising north of 10% due to virus and is happy with the steps the Fed has taken pertaining to the coronavirus crisis.
More to come…